UK High Court Weighs in on the Copyright Exposure of E-commerce Marketplace Platform
The principal issue seems to have become whether the defendant's operation of the TEMU platform amounted to copyright infringement or was protected by the hosting defence. On a more practical level, title to the copyrights in issue was a key factor.
The Facts
The plaintiffs are part of a group of companies operating an online fashion and lifestyle retail business through websites featuring the SHEIN brand. Shein-branded garments in issue in the case were procured under a supply model, under which suppliers create initial product designs for which the plaintiff provides guidance and then later refines the designs. All product listings on the plaintiff's website are accompanied by one or more photographs of the relevant product.
The plaintiff 's procurement policies often leave suppliers with unsold Shein stock. For example, if a supplier produces 1,000 units for a new style while the plaintiff’s typical initial order is only for 200 pieces and if weekly sales do not reach 40–50 units, the product could be delisted within about a month leaving the supplier with hundreds of items of stock. It appears that when such suppliers listed their products on other platforms including the defendant’s platform, they frequently used the same photographs as had been used on the plaintiff’s website.
The defendant operates a global online retail platform branded as TEMU. The defendant does not sell its own products on its platform. The merchants who sell on the TEMU platform are independent entities who are not affiliated with the defendant and are free to sell their products elsewhere, such as to the plaintiff. Every product listing on the TEMU platform is accompanied by one or more photographs of the product.
On June 6, 2023, the plaintiff wrote to the defendant advising that it owned the copyright in all photographs of models and products that appear on the SHEIN Website and alleged that the defendant had copied the plaintiff’s content and was using it on the TEMU website without the plaintiff’s consent, constituting copyright infringement. The letter appended a schedule listing 8,036 TEMU URLs which the plaintiff alleged incorporated infringing content.
On the same day the plaintiff issued its claim it filed an application for an interim injunction requiring the defendant to remove copyright images in issue. The application was heard and a preliminary interim injunction granted. The order allowed the plaintiff to issue take-down notices relating to the infringing images. The order was supported by a conventional undertaking from the plaintiff to indemnify the defendant for any loss it might suffer because of the inappropriate granting of the order.
At a case management conference, it was ordered that the issues of subsistence, ownership and infringement of copyright should proceed initially by reference to a representative sample of the allegedly infringing works.
Copyright Ownership
The plaintiff’s claim to copyright ownership was based on works created by employees or assignments from suppliers. The evidence concerning this issue was complex but for the suppliers it could not establish title at the relevant times.
Infringement
The plaintiff alleged infringement as follows
Primary infringement by authorizing users of the defendant's website to reproduce the photographs by viewing them on a web browser;
Alternatively, by communicating the copies of the photographs to a "new public" in the form of the users of the defendant's website; and
Alternatively, secondary infringement by exhibiting and distributing the photographs to users on the website, with knowledge or reason to believe that the photographs were infringing copies.
The defendant denied infringement and relied on the hosting defence. It also counterclaimed for damages based on the plaintiff's damages undertaking in respect of its removal of product listings for which the plaintiff did not own the copyright to the photographs notified for take-down.
The Decision Roadget Business PTE Ltd v Whaleco UK Ltd [2026] EWHC 2165 (Ch)
The Judge agreed with the defendant. 'Authorize' means the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement. On this basis the defendant’s conduct did not amount to the authorization of copyright infringement by the users of its website.
There was no doubt that the defendant was aware that some of the photographs uploaded by merchants might infringe copyright. There was nothing in the evidence before the court to suggest that the TEMU platform incorporates tools specifically intended to facilitate the uploading of infringing images, or that the defendant encourages or promotes the use of infringing images. In fact, the defendant contractually prohibits merchants from uploading infringing content and has an IP complaints process enabling rightsholders and users to notify it of product listings with infringing content. The defendant’s conduct did not amount to a communication to the public of the trial sample photographs.
With respect to the last claim the defendant removed the product listings for all of the trial sample works and the plaintiff’s case of secondary infringement by exhibiting or distributing infringing works was not made out on the facts.
It was unnecessary to address the hosting defence but the Judge did so for completeness. It was common ground that there were four cumulative conditions required to establish the defence:
i) The defendant was an "information society service provider" which provides a service consisting of the storage of information provided by a recipient of the service.
ii) The defendant was an "intermediary" whose activity is of a "mere technical, automatic and passive nature".
iii) The defendant either (a) does not have actual knowledge that it is storing infringing content and is not aware of facts or circumstances from which that is apparent; or (b) if it does obtain such knowledge, it acts expeditiously to remove the unlawful content.
iv) The recipient of the service is not acting under the authority or control of the service provider.
If the hosting defence applies, the service provider is not liable for damages or any other pecuniary remedy because of the storage of infringing content. The defence does not operate as a defence to injunctive relief.
There was no serious dispute that the defendant provides an information society service, in the form of an online marketplace which processes and stores information provided by third-party merchants. The Judge concluded that the other conditions were satisfied and that the defence would have been available to the defendant.
Comment
The decision has received significant press attention as the test for the legal responsibility for hosting for e-commerce marketplace platforms. However, it seems to conflict with a Canadian decision which said the crux of the term “information location tool” was the locating of information—it is a tool that makes it possible to locate information that is available through the Internet. Protection is available to intermediaries that provide tools that enable users to navigate and find information, where it is located on the Internet. Protection is not available to providers that gather information from the Internet and make it available to the user on the provider's own website.
The decision also illustrates the importance of evidence establishing ownership of copyright.
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John McKeown
Loopstra Nixon LLP.
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This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances. Copyright © John Mckeown, All rights reserved. To unsubscribe to the IP Update please send me an email at jmckeown@Ln.Law
A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.
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